Association of Private Breweries demands aid measures from politics

The small and medium-sized brewing industry is looking with great concern at the worsening consequences of the Russian Federation's war of aggression on Ukraine, which is contrary to international law and inhumane. The focus here is on the immeasurable suffering caused by the Putin regime in its neighbouring country Ukraine, but increasingly also among its own population.

The Association of Private Breweries in Germany, together with its regional associations, therefore fully supports the German government's course of sanctions against the Russian Federation within the scope of its possibilities and has itself suspended all economic cooperation agreements with its Russian partner association for an indefinite period of time and terminated all economic activities in Russia in order to send a clear signal.

Cost increases in numerous segments

The war sparked by the Russian Federation against Ukraine, however, has also had a considerable economic impact on the approximately 800 member companies of the Association of Private Breweries in Germany, most of which operate regionally and are structured as craft breweries. As an energy-intensive sector, the exorbitant rise in energy prices is hitting the medium-sized brewing industry particularly hard.

Added to this is the current difficult raw material situation. Even if the German breweries do not have to worry about their hop supply due to the pleasing hop harvest in 2021, the malt market is causing them all the more headaches. Due to a below-average malting barley harvest in Germany and other important growing countries last year, malting barley prices are climbing to new record highs almost weekly. The ongoing war between Russia and Ukraine continues to shake up the malting barley market.

Similarly, prices for auxiliary and operating materials, such as cleaning agents and disinfectants, as well as for packaging materials, such as returnable glass bottles and crown corks, are currently rising massively.

"High prices go to the substance of the businesses"

The medium-sized brewing industry is confronted with these cost increases at a time when it has already suffered greatly economically and financially after more than two years of the Corona pandemic. The closure of restaurants and hotels for several months, as well as the elimination of practically all festive and club events, has led to a considerable decline in the important sales of draught beer - for a long time this was zero - as well as in the sales of non-alcoholic beverages, which could not be nearly compensated by partial increases in the bottled beer business in the trade.

"After more than two years of the Corona pandemic, during which beer sales suffered greatly, the current high prices for raw and auxiliary materials, energy and transport are taking their toll on the businesses. If prices continue to remain at such a high level, in individual cases the existence of a business may well be at stake," Roland Demleitner, Managing Director of the Verband Private Brauereien Deutschland e.V., comments on the current situation.

In order to secure their economic survival, a large number of breweries have already been forced to adjust their beer prices due to the increased costs. "At the moment, no one can say specifically how much more expensive the crate of beer will become, because simply no one can say exactly how high the prices for raw materials, energy and logistics will still rise in the near future," says Roland Demleitner.

Retention of reduced beer tax rates provides relief

The German Private Breweries Association therefore appeals to the political decision-makers to create relief possibilities for energy prices on the one hand, and on the other hand to give priority to supplying the brewing and beverage industry as a system-relevant branch of industry with energy sources in the event of a crisis.

Another measure that would be effective in the medium term would be to extend the beer tax rates of the "old" beer tax volume scale. As part of the Corona pandemic, the tax rates of the beer tax volume scale were set at the level before the introduction of the Budget Support Act in 2004 as a relief for small and medium-sized breweries - but only for a limited period until the end of 2022. As of today, this limited period is to expire within the framework of a draft of the 8th Act for the Amendment of Excise Tax Laws. In view of the cost increases that have occurred in many areas in the meantime, maintaining the reduced beer tax rates would lead to a clear relief and significant improvement of the economic situation of the medium-sized brewing industry and thus preserve the brewery and beer culture that exists in Germany and is unique worldwide in all its diversity in the future.